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Cadillac’s New XT4 Chases Small SUV Stars From Audi, BMW, Porsche

(Bloomberg) -- Tuesday evening, at a party at its West SoHo headquarters in Manhattan, Cadillac unveiled the XT4 in honor of the New York Auto Show.

The compact XT4 SUV is crucial for the brand’s sedan-heavy portfolio after total brand sales dropped 8 percent in the United States last year. Targeted directly at consumers valued for affluence and youth, the XT4 must prove that Cadillac is just as good as Germany’s best small SUVs, such as the Audi Q3, BMW X3, Jaguar F-Pace, and best-selling Porsche Macan.

And it must do it quickly. Even with some success in China, where half of its sales go, Cadillac has struggled stateside because U.S. dealers have had only two SUVs to sell: the XT5 crossover and the Escalade. Buyers need more options than something very big or rather mid-sized and mediocre. Meanwhile, Audi, BMW, and Mercedes are wheeling and dealing, with SUVs of all sizes and powertrains available, especially multiple models in the small luxury-crossover segment. Demand next year for vehicles in that group will grow 13 percent in the U.S. and more than 10 percent in China, according to researcher IHS Markit.

XT4 follows the larger Cadillac XT5 that, although heralded in 2015 with much hype, didn’t perform quite as well as many at Cadillac had hoped.

Still, rather than emerging as just a “baby” XT5, the XT4 is unique to itself. It is built on an all-new premium compact SUV architecture, with a Cadillac 2.0L Turbo four-cylinder, 237-horsepower engine and a nine-speed automatic transmission. It comes with a choice of front- or all-wheel drive. The high-gloss grille and vertical-oriented LED headlights are inspired directly by the stylish Escala concept Cadillac showed in 2016 at the Pebble Beach Concours d’Elegance.

It offers multiple new drive modes and the trappings of a higher-luxury car, including a large sunroof, cold-weather packages, 20-inch sport wheels, and visibility packages to enhance crash avoidance. A combined 27 miles per gallon on city and highway driving puts it toward the front of the pack when it comes to fuel efficiency.

Fortunately for drivers everywhere, the XT4 leaves behind the horrible “haptic” touchscreen system that plagued Cadillac vehicles last year. This model has "piano-key" metal-finish buttons that control climate and other settings, plus ambient lighting, with additional buttons for seat controls and the parking warning. USB outlets abound. Inside as well is a thick, new three-spoke, leather-wrapped steering wheel and sport-inspired seating, with prominent seat-bottom and seatback bolsters that come with a message function, too. All these trappings of comfort and convenience will be key to attracting the discerning young buyers Cadillac desperately needs to cultivate. One auspicious attribute: The XT4 has 22.5 cubic feet of storage space with the seats up, more than the excellent, successful Porsche Macan.

Ultimately the XT4 will probably be a primary Cadillac to house the brand’s first efforts at electric and high-tech driving technology. Cadillac President Johan de Nysschen has said parent General Motors Co. believes the brand is a good place to debut new electric and even self-driving vehicles, starting in the next decade. Cadillac will get a large share of the 20 all-electric vehicles GM will produce for the global market by 2023.

The XT4 has seating for five. Sales start later this year, with pre-orders beginning now. Pricing starts at $35,790.

To contact the author of this story: Hannah Elliott in New York at helliott8@bloomberg.net.